If it all sounds reminiscent of headlines from 2010 and 2005, and, in fact, 1996, that’s because it is. It didn’t happen then, and it won’t happen now. But beneath the overhyped fears, there are real issues—backbone policies, cybersecurity, the management of the domain-name system, the free flow of information across national borders—to be discussed. They’re big enough, and complicated enough, that the United States is sending a 100-person delegation to Dubai for the two-week-long World Conference on International Telecommunications [WCIT], the ITU meeting that’s the impetus for the headlines.

The delegation is led by U.S. ambassador Terry Kramer, a longtime telecommunications executive. He spent five years at Vodafone, the giant multinational cellular company that, here in the U.S., owns a 45 percent stake in Verizon Wireless. He’s also served as CEO of Q Comm International, an electronic payments firm. He was an entrepreneur-in-residence at the Harvard Business School, and he’s my guest today by phone.

Terry, welcome to the podcast.

Terry Kramer: Good, well, Steven, thank you very much.

Steven Cherry: Terry, there’s other telecommunications issues at stake at WCIT, this conference in Dubai, but increasingly the Internet is subsuming all communications. Maybe we could just start by reminding our listeners who runs the Internet now.

Terry Kramer: The Internet is run by a distributed group of entrepreneurs, individuals, businesses, etc., that have created the Internet as we know it today. You know, the beauty of the Internet is this distributed nature is where you’ve gotten all this innovation, and you need content, etc. And so, first of all, the Internet is a worldwide distributed environment and forum. Now, when we talk about governance of the Internet, there are a variety of multistakeholder organizations that govern the Internet in areas that require governance, organizations like IETF [Internet Engineering Task Force] and W3C [World Wide Web Consortium], etc. These are open organizations. These are organizations that have technical expertise in speed and what these organizations are, not closed organizations or ones that are dominated or controlled by governments. And that, again, is what’s driven a very healthy, vibrant Internet ecosystem.

Steven Cherry: One big issue seems to be peering. Right now, generally speaking, for the backbone providers and other Internet service providers, if they give one another roughly as much traffic as they carry, they call it a wash, and they don’t bill one another or even keep track of the traffic, except in the aggregate. It’s one of the things that keeps the Internet incredibly efficient. Are there proposals to change that?

Terry Kramer: Yeah, so there are proposals that would require the routing of traffic to specific points where governments could say, “This is how the traffic needs to route.” And it’s got two negative implications to it: One is the model you just talked about, is there are today 425 000 different independent routes of traffic that get negotiated individually based on supply and demand of data, etc. And that has driven down cost of things like transit in peering to very, very low levels. Now, that allows this kind of free model of the Internet to flourish. The other issue with this traffic management or traffic routing set of proposals from a lot of nondemocratic nations is my earlier point, is it opens the door for countries to more easily be able to see who’s doing what. And again, that’s a complete violation of all the things we believe in, in democracy, in free speech. So we think it’s a great example of a lose-lose, and we’re saying we want this sector to be successful globally, not just across the U.S. but across the world. Let’s be very pragmatic about what we’re putting on the table as what we think are improvements to the operating environment.

Steven Cherry: Cybersecurity is one issue that in some ways has to be dealt with on an international level, and it seems like one of the few things that maybe needs a UN-type organization to deal with it. What’s at stake, and is the ITU the place for it?

Terry Kramer: Yeah, so first of all, candidly, I wouldn’t agree with you about the premise you laid out about the ITU or a single organization being appropriate for cybersecurity. So let’s first go into the problem: There is absolutely no doubt that cybersecurity is a huge issue. So if you look at something like malware, there are 57 000 malware attacks a day. The number has doubled over the past few years, so it’s a huge, increasing problem. Spam is a problem, again, globally it’s a problem, hacking is a problem, etc., so there’s absolutely a key issue that we’ve got cyberchallenges.

But the key question again is, with the spirit of pragmatism, is, What’s going to work best? The problems that come up require a lot of technical expertise, because each of these attacks are different in nature. They come from different places. Their derivation technically is different. They require agility. Somebody’s got to move very, very rapidly. Every second a network is down or affected, it’s affecting people’s ability to communicate and to transact, so they need to have that agility, and you need to have organizationally an openness that anyone can participate in these fora to help address these issues. If you have a closed forum, people will get very cynical about who’s doing what.

So the issue is, How to you get most effective at dealing with a cyberissue? And our point of view is, it can’t have any one single organization, whether it’s the ITU or a single government, effectively deal with this problem, and this is a lot of the basis for our belief in multistakeholder governance, that having these distributed organizations that have technical expertise, that move rapidly, that’s where we’re going to get a positive effect on a broad-based issue.

Terry Kramer: They do. Now, again, there’s a couple of philosophical points. There are countries that tend to be nondemocratic that believe a lot of control should be moving over to government organizations or a UN-type organization, and we fundamentally do not agree with that. We believe that if you look at the fundamental success of, you know, whether it’s the telecom sector over in mobile or the Internet, their success came from not having government control on them but allowing, again, this broad-based innovation where there could be a lot of different services developed, content and approaches that met the needs of local customers, where you could have an agility.

So there’s a fundamental philosophical difference about the role of government and the UN in all these issues. Not because any one government or the UN is bad, but because we just think that is not an effective solution. The second point to make is there’s a variety of proposals that are being made that sound nice at the high level. Things like, “Well, we think our networks are being attacked, we need to defend them, etc.,” and then you look at what the proposals are, and it says we need to route traffic in a certain way, we need to be able to view the traffic, it’s a national security issue, etc., etc. And what you find pretty quickly is it’s a thinly veiled effort at basically rationalize and validate censorship. And we’re going to be quick to comment on that and say that we just think fundamentally that is a bad outcome—a bad outcome from a democratic standpoint, bad outcome commercially, and we will continue to call these things out.

Steven Cherry: China’s footprint on the global stage has been increasing in almost every arena but it’s never had a big role to play in the Internet. Is that going to change, and is this conference a place where we’ll see it?

Terry Kramer: Specifically for China, I mean China’s had a growing influence and reliance on the Internet. Again, China has put forward some proposals that have gotten into a concern about governance and who’s managing the Internet, and they’ve also gotten into some proposals that have to do with traffic management and routing. One of the messages we’ve shared, and we have a good relationship with our colleagues there, is there’s a strong economic issue here that any of these proposals run a strong risk that you’re going to cut off traffic. And that creates a weakness in the economy. That creates a weakness of people interacting, innovation activities, and we’ve raised that multiple times.

Steven Cherry: Terry, you were appointed a U.S. ambassador specifically for this conference, which I think confuses people who aren’t familiar with the diplomatic world, but I guess that’s how it works. And you were confirmed by the Senate and all, as I understand it. Let me ask you: A hundred-person delegation is pretty big. Why is it so big?

Terry Kramer: So, the reason the delegation is so large is because of the level of interest. You know, people are realizing these two sectors have a lot of impact, and so we’ve got a delegation of over 100, as you mentioned. It’s got 50 representatives from U.S. government, from the FCC, from the Commerce Department, from the Department of Defense, from NASA, and certainly the State Department. There’s a large contingent, roughly 40 or so, from industry, and these are Internet companies and these are telecom companies, and then a large contingent, the remaining piece, civil society, have a very big focus on use of technology to support democracy and free speech.

So we had a huge number of sign-ups for this. This delegation’s been incredibly useful, because one of our jobs at this conference are to be global leaders. Global leaders need to be experts in understanding the technology, understanding the impact, understanding, importantly, this is a global phenomenon. This is not a U.S. thing. The U.S. controls this or that, but very much as the technologies roll through different nations, they create a life of their own that creates their own goodness. And so this delegation’s helped develop our points of view, they’ve helped with outreach activities in different governments, and they’ve helped inform what does a good solution look like? How do we find success? Because that’ll be the best outcome for this conference, is to understand where these opportunities are and make sure we’re not putting handcuffs on important sectors.

Steven Cherry: I was going to ask you about that. What will count as a successful conference for you? Is it just the negative result that nothing changes very much, or are there positive things you’d like to see come out of this?

Terry Kramer: So, a successful conference, first of all, and I think this one part is a big [one], is people are acknowledging the impact of technology and the Internet. That’s great, because we can be explicit about its positive impact everywhere. The second thing to me about what a successful conference will look like is pragmatism and simplicity. You know, we all know as business leaders or as public servants, etc., that we’re all bright and ambitious people, and there’s a natural tendency to want to go in and tinker with things. We think we’re adding value by changing this and changing that and adding this attribute and that attribute, etc., but in the process of doing that, we often complicate things and actually create more of a drag on those environments.

We need to view as success here, realizing “Let things go,” that things can operate well without it. Think, in this case, the last time these ITRs [International Telecommunications Regulations] were reviewed was 24 years ago. And so if you look what’s happened in those 24 years, the mobile industry’s gone from almost 0 percent penetration to almost 100 percent, and in developing markets, 70 percent of the population have got a mobile. If you look at the Internet space, it was almost nonexistent in ’88, and now it’s one of the fundamental ways we deal with one another. And you say, “Okay, as we’re looking at these ITRs, tell me exactly what’s broken?” And the reality is, there’s very, very little broken.

Steven Cherry: You mentioned mobility. Are there any big telecommunications issues here that aren’t Internet issues?

Terry Kramer: So there’s a variety of issues here. If you look back in ’88, there were, in the early mobile industry, there were basically just government-owned networks. And so one of the things we’re trying to update in these ITRs is to acknowledge in most markets now you have several competitors. And those competitors are driven by commercial agreements, and we should be supportive of that commercial liberalized environment. So that’s an example of a telecom piece where we want to update the wording to reflect the current environment. We don’t want to keep referring to government-owned networks that need to be subsidized and funded, etc.

There’s some issues on mobile roaming—people want to make sure there’s transparency in mobile roaming when people travel abroad, which we think is a very legitimate issue. So one of the proposals we put forward is we want to suggest that there’s enhanced transparency. Transparency of rates, transparency of usage, etc. We don’t support rate regulation, because we think rate regulation doesn’t come off well. People generally don’t make good decisions in those areas, they can stifle investment, etc. So those are a couple examples of the telecom issues. Candidly, those are the right issues we should be talking about. That was the charter of this set of ITRs at this conference, and there are many people trying to hijack things and move it over to Internet issues, when it really belongs squarely in the telecom space.

Steven Cherry: Well, Terry, as we record this, you’re all set to head out to Dubai. The conference starts Monday, the fifth [Editor’s note: Correct date is the third]. You have a big delegation and a big mission, and I wish you luck with both.

Terry Kramer: Great. Well, thank you. I appreciate the support, and I appreciate the interest.

Steven Cherry: We’ve been speaking with U.S. ambassador Terry Kramer, who heads a hundred-person delegation this week and next at the World Conference on International Telecommunications in Dubai.